UK green lender pledges £1bn for wind farm investors

The Green Investment Bank (Gib) set up by the UK government to help provide funding for new environmentally-friendly infrastructure projects is undertaking a money-raising round, aiming to realise £1billion.

The money will be used to provide funds up-front to set up a channel by which private investors can buy shares in already-operational wind farms.

According to The Guardian, the fund is likely to prove popular with financial institutions such as pension funds and countries' sovereign wealth funds, one of whose main aims is to provide steady, long-term returns.

When government business secretary, Vince Cable, launched the fund in 2012, it added, it was intended that it would put its cash into renewable energy and power generation schemes which are often shunned by private financial institutions because of the perception that they are too risky, or will take too long to generate any returns.

GiB chief executive, Shaun Kingsbury, said: "We want to do more to maximise our green impact. We plan to extend our reach into new markets like community-scale renewables.

"And we plan to raise new capital for the first time through the creation of a new £1billion fund for operating offshore wind assets."

The fund's biggest investment to date is a loan of up to £100million to the operator of the UK's biggest coal power station, Drax in North Yorkshire, to convert it to run on biomass, principally wood pellets.